WARSAW: Poland expects its power capacity to increase by at least 200 megawatts (MW) annually in coming years thanks to planned incentives for smaller electricity consumers to invest in solar panels, the entrepreneurship and technology minister said.

Most electricity produced and used in Poland comes from aging coal-fuelled power stations and thus a rise in the cost of carbon emissions has boosted power prices.

The ruling Law and Justice party was elected in 2015 on promises to sustain the coal industry, and it introduced policies that made it harder to invest in renewable energy.

But the government changed direction last year due to a need to meet EU targets on renewable energy, and in June it approved a law amendment to reduce obstacles facing green energy investment.

Still, the government is not unanimous on energy policy, with Energy Minister Krzysztof Tchorzewski supporting coal while Entrepreneurship and Technology Minister Jadwiga Emilewicz promotes clean air programmes and green energy.

Emilewicz has proposed that incentives be introduced for households, smaller companies and local authorities to invest in solar panels, so they can generate electricity for their own needs and resell what they do not use.

Such inducements include subsidies, easier financing, and a lessening of red tape.

"It is highly probable that by 2020 and beyond, energy prices will not go down and other solutions than ad hoc cuts need to be sought because the spectrum of available instruments is limited," Emilewicz told Reuters.

"This is why we prepared a programme for the development of prosumer energy," she said, referring to those who are both producer and consumer.

"If the price of electricity sold by the big power producers does not fall, then thanks to prosumer energy an individual consumer will not have to pay for it or will pay much less."

Poland's wholesale power prices jumped in the second half of 2018. The ruling party adopted a law in December designed to prevent increases in electricity prices for households and industries in 2019 ahead of a general election in the autumn.

Emilewicz pointed to what she called "snowballing" interest among banks and investors in the incentives programme and said it should help Warsaw meet its EU renewables targets.

"We expect that solar panels with total capacity of 200 MW will be installed in 2019, thanks to the programme. We want around 200 MW in solar panels per year to be added in coming years," Emilewicz also said.

Poland currently has around 300 MW of installed capacity in solar panels. Solar energy has so far covered only a small fraction of the country's energy needs due to high investment costs and poor sunlight, but prices of solar modules are falling rapidly and they have become more effective.

On a plan by the Energy Ministry to build a coal-fuelled power plant in Ostroleka, northeast Poland that has been criticised by green groups and analysts, Emilewicz said:

"That region of Poland is a blank spot when it comes to energy sources, and a new means of generating electricity should be built there. The question is, with what kind of fuel?"

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